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You have two opposing hypothesis:
"I believe our audience will enjoy the theme of capturing undead creatures"
"I believe our audience will enjoy the theme of capturing demonic creatures"
...and that's fine! Everyone's entitled to their opinion, and that's what it is. Perhaps I like the idea of capturing different breeds of Unicorn w/ various powers depending on breed. I'm making the assumption that, ultimately, you want people to play this game. Who are these people? Perhaps you have an idea on who your audience is. The best way to validate or disprove a hypothesis is to ask your intended audience. Interview with them, introduce them to the concepts: get their feedback. They may give you insights you hadn't even considered. Maybe they'd want you to combine the two, love one of those hypothesis or give you pause to consider your direction and pivot the creative focus of the project onto a slightly different theme both you, your colleague and your audience will love.
When in doubt: ask your intended audience. Nothing beats settling a difference in opinion than getting the collective feedback of those who will have a stake in your product.

There's been some good responses so far! Here's what I feel I can contribute:
There's that cliché saying: "There's no such thing as an original idea". I'm not sure how heavy originality weighs in your mind, but I would focus on the kind of mechanics/themes/dynamics etc. you are enjoying at this moment in time. Perhaps you feel burnt out on a particular theme/dynamic: what are you doing instead with your time when you feel out of ideas or uninspired? Does it refresh/reset you? Is it fun? Perhaps you can spot a theme or a mechanic in that you can elaborate on. A hidden gem, which is something fun and would hold your attention!
What are you participating in with other people that is fun? What are other people finding fun, which could inspire you? This leads me on to my main point: get a fresh perspective from other people. Speak to some people to get some ideas, make some assumptions on what and why people are enjoying, then test and validate those assumptions before going back to said people for feedback and more inspiration. Then just keep repeating the cycle and continiously innovate ideas!
In the business world this is called customer development, which you do in parallel to developing a product, i.e. a game in this case. In the business world, getting inspired from others, exploring it methodically and syetematically and creating something new out of it is also known as Lean business practices. I feel this scientific method approach can be applied to any kind of innovating (like making a game) and could save you from burnout by getting inspired off of other people to kick start your own ideas. I suggest checking out the books: The Four Steps to Epiphany by Steve Blank, The Lean Startup by Eric Ries and Lean Customer Development by Cindy Alvarez. They helped me develop the mind set to approaching stuff that way.
There's loads of ways to find inspiration in yourself just from looking through the eyes of others for a bit!
Hope this helps.

What angle are you trying to achieve this from?
Are you a pixel artist?
Are you a programmer with experience in creating games, graphics programming or at least popular engines like Unity?
Are you a game designer?
Depending on who you are and what your current skill set is completely changes the answer. There's also no right answer.

It sounds like we may have to see a well structured design document in plain English with the individual mechanics clearly defined in order to grasp the full scope of your project + the design issues you're having with it. I'm sort of getting it but there's a bit of guesswork needed. It's difficult to pick out what you're asking for.
Hope this helps.

Hi Chazz85,
Could you offer a bit more information about the game? What's the objective of the game? What are the features of the game and what's currently implemented? It looks like you've been putting a lot into it so far and the core building mechanics are clear but that 1 minute video and no further information makes it hard to judge. Based on literally what I've seen and no other information I'd say it isn't. But tell me more: Sell your game to me!

I've not had any personal experience with those books.
However, my favorite book combo for C++, learning the mind set for programming and OOP is:
How to program using C++ by Tony Jenkins (http://www.amazon.co.uk/How-Program-Using-Tony-Jenkins/dp/0333990250)
For all the basics and,
Data Structures & Algorithms C++ (http://www.amazon.co.uk/Data-Structures-Algorithms-Prentice-Hall-Object-Oriented/dp/0135791782)
For the more advanced stuff. Glen Rowe was also the lecturer who came before my lecturer at my University!
Both books taught me very well and I can't recommend them more highly!
P.S. if you wan't to get really deep into OOP design, check out Head First Object-orientated Analysis and Design (O'reilly) and Applying UML and Patterns: An Introduction to Object-Oriented Analysis and Design and Iterative Development by Craig Larman. There's also literally any books by Steve Mcconnell, namely Code Complete 2, which will serve you very well.
I use all these books for reference.

No worries! Glad to see you're flowing with ideas.
I like the gauge idea you have for stats. This is just off the top of my head: have that gauge represent the 'health' for the individual body parts. The character's stats are directly influenced from their respective body parts. If a body parts health falls below a certain percentage it starts to modify your character's stats in a negative way.
From there you probably don't have to make stats as important as health. Perhaps at full health and your player's eyes are not damaged and they have +2 in accuracy, they'll be better shots. If they're damaged to 50% they'll take a drop to their accuracy rating but the +2 they have makes that drop less etc.
Is this sort of getting to the vein of your question? It sounds like you're trying to find trade-offs to balance power/progression and making the game a challenge. So I say make their physical/mental health the biggest thing they have to worry about if they want to be awesome. Don't jump off a cliff and break your leg if you want to run faster!

If you're programming together toward a common goal: to get people through the not-so-desirable bits you can implement like a fun/lighthearted version of SCRUM development. Treating your club as a small team and rewarding the team with fun stuff at the end of each sprint. Plus it gives them an incentive to learn the boring bits too, if they found it boring! However, This is me riffing off the top of my head, I've not implemented something like that before.
Also, watch Fight Club, it's good!! ha ha.

Focus on the core benefit and not the skills. 'I'm a game developer and I create fun and interactive entertainment for all kinds of people' , then as wintertime said, tell em' about ya awesome games if they're interested! :)

Ack don't worry - I'm sure someone can move it for you if you wanted, might help improve your chances of finding a good answer if it's located there.
I'm very new to this process myself, I've not worked with visual artists before. However, some things off the top of my head:
- Perhaps you just need to literally list the assets you need created: isometric dragon sprites that look like <blah blah> and it's different animations etc.
- Particular tile sets you need etc.
Maybe give them a creative document giving them an overview of the game and your ideas for the overall look/feel and theme of the game; ask them to mockup a few ideas based on those aesthetics etc.
It sounds like you're exploring the visual style of your game a bit and you're unsure of how it's going to look outside of your head. I think ya need to find a visual artist who will be patient, who will keep asking you questioins (and vice versa) and who will give you early and constant feedback. Someone who will develop it with you closely :).
I hope some of that helps a bit! Ha ha.